Framework for Measuring Innovation Potential in Indian Companies: A Case Study
Varadarajan Rangarjan* (Department of Management Studies, MITS, Madanapalle, Chittoor, A.P., India) and M. S. Arunachalam (Professor, T. J. Institute of Technology, Chennai, Tamil Nadu, India), *Corresponding author's Email
Rangarjan, Varadarajan and Arunachalam, M. S. (2016), “Framework for Measuring Innovation Potential in Indian Companies: A Case Study”, MERC Global’s International Journal of Management, Vol. 4, Issue 1, pp. 06-14.
Submitted: April 20, 2015, Revision received: August 28, 2015, Accepted: September 12, 2015
Subsequent to opening up of the Indian economy, domestic companies have been under competitive pressure from multinational companies from across the world. One of the major reasons for the domestic company’s inability to successfully compete globally is that they have grown up in protected environments and are under prepared to bring in innovation either in products, or processes, or strategies. This paper is an attempt at building a scoring framework for innovation potential in companies based on internal and external elements to them. The framework provides for industry-specific scoring through prioritisation of the internal and external elements. Additionally, the paper introduces a scaling method for assigning scores to the elements of the company. Further, a case study of a company in the auto component industry has been described as an example to show how this framework can be used to assess the innovation potential of companies. The framework is seemingly subjective, but with sufficient justification reliable scores that are reproducible can be obtained.
Amit, R. and Schoemaker, P. J. (1993), “Strategic assets and organisational rent”, Strategic Management Journal, 14, 33–46.
Barney, J. B. (1986), “Strategic factor markets: Expectations, luck, and business strategy”, Management Science, Vol. 32, Issue 10, pp. 1231-1241.
Barney, J. B. (1991), “Firm resources and sustained competitive advantage”, Journal of Management, Vol. 17, pp 99-120.
Cohen, J. and Levinthal, D. A. (1990), “Absorptive capacity: A new perspective on learning and innovation”, Administrative Science Quarterly, Vol. 35, Issue 1, pp. 554-571.
D’Aveni, R. A. (1994), Hyper-competition: Managing the Dynamics of Strategic Manoeuvring, New York: The Free Press.
Dierickx, I. and Cool, K. (1989), “Asset stock accumulation and sustainable competitive advantage”, Management Science, Vol. 35, pp. 1504-1511.
Dougherty, D. and Hardy, C. (1996), “Sustained production innovation in large, mature organisations: Overcoming innovation-to-organisation problems”, Academy of Management Journal, Vol. 39, Issue 5, pp. 1120-1153.
Fiol, C. M. (1996), “Squeezing harder doesn’t always work: Continuing the search for consistency in innovation research”, Academy of Management Review, Vol. 21, Issue 4, pp. 1012-1021.
Grant, R. (1996), “Prospering in dynamically-competitive environments: Organisational capability as knowledge creation”, Organisation Science, Issue 7, pp 375-387.
Hamel, G. and Prahalad, C. K. (1994), Competing for the Future: Breakthrough Strategies for Seizing Control of Your Industry and Creating the Markets of Tomorrow, Boston, Mass: Harvard Business School Press, USA.
Henderson, R. M. and Clark, K. B. (1990), “Architectural innovation: The reconfiguration of existing product technologies and the failure of established firms”, Administrative Science Quarterly, Vol. 35, Issue 1, pp. 9-31.
Kanter, R. M. (1989), “Swimming in new streams: Mastering innovation dilemmas”, California Management Review, pp. 45-69.
Kogut, B. and Zander, U. (1992), “Knowledge of the firm, combinative capabilities, and the replication of technology”, Organisation Science, Vol. 3, pp. 383-397.
Pisano, G. P. (1997), The Development Factory: Unlocking the Potential of Process Innovation, Boston: Harvard Business School Press, USA.
Prahalad, C. and Hamel, G. (1990), “The core competencies of the corporation”m, Harvard Business Review, Vol. 68, Issue 3, pp. 79-91.
Utterback, J. M. (1994), Mastering the Dynamics of Innovation: How Companies Can Seize Opportunities in the Face of Technological Change, Boston, MA: Harvard Business School Press USA.
Verona, G. (1999), “A resource-based view of product development”, Academy of Management Review, Vol. 24, Issue 1, pp. 132-141.
Wernerfelt, B. (1984), “A resource-based view of the firm”, Strategic Management Journal, Vol. 5, Issue 5, pp. 171-180.
Wolfe, R. A. (1994), “Organisational innovation: Review, critique and suggested research directions”. Journal of Management Studies, May, Vol. 31, Issue 3, pp. 405-425.